The confirmation by the Southwark Crown Court in London on June 12th, 2015 of the charge against me of conspiracy to corrupt in relation to a Hungarian transport project – early 2006 at the time when I was just appointed SVP Ethics & Compliance – comes as a great shock, even though this development was expected further to the request for an interview launched one year ago by the Serious Fraud Office.

This example shows how exposed a Chief Compliance Officer can be. This reinforces the importance for the new comers in the ethics and compliance community to think carefully about personal responsibility before accepting a job as Chief Compliance Officer.

I will face these hard times as well as these long and painful judicial procedures with full determination to prove my integrity and my good faith, up to their final outcome. In the meantime, through my company “jdl.ethiconsult”, I will continue to advise companies in Ethics and Compliance taking into account this enriched experience.

The fight against corruption is necessary to built a fair level playing field in the international trade. Beyond all the existing literature, guidelines, pressures from NGOs, hard Laws and soft Laws, provisions from the enforcement authorities, Anti-Corruption Summits, the viewpoint of the European Union International in its Anti-Corruption Report represents an important milestone.

The European Commission has issued its report in February 2014 highlighting the need to fight corruption in the different Member States:

“Member States that effectively address corruption within their own borders often face challenges regarding the behaviour of their companies abroad, especially in countries where corrupt practices are widespread. The OECD conducts strict monitoring in this field, highlighting in its regular evaluations both good and less satisfactory results of enforcement.

There are good practices in a number of Member States, either in relation to a significant number of successful prosecutions and a high level of sanctions, in prioritising foreign bribery cases or in the recent adoption of a comprehensive bribery act strengthening the legal and procedural tools for preventing and prosecuting corruption, especially foreign bribery.

The Bribery Act 2010, which came into force on 1 July 2011 places the UK among the countries with the strongest anti-bribery rules in the world. It not only criminalises the payment and receipt of bribes and the bribing of a foreign official but also extends criminal liability to commercial organisations that fail to prevent bribery committed on their behalf. Provisions on extra-territorial jurisdiction allow the Serious Fraud Office (SFO) to prosecute any company, or associated person, with a UK presence, even if the company is based overseas. Commercial organisations are exonerated from criminal liability if they had adequate procedures to prevent bribery.

The accompanying Guidance to Commercial Organisations (GCO) by the SFO promotes awareness of the new legislative framework and guides businesses in a practical manner (including case studies) regarding their obligations under the Act to prevent or detect bribery. In line with a previous OECD recommendation, the GCO makes it clear that facilitation payments are considered illegal bribes and provides businesses with criteria to differentiate hospitality from disguised forms of bribery.

The SFO has wide powers to investigate and prosecute serious and complex fraud, including corruption. In certain circumstances, the SFO can consider civil recovery orders and settlements in accordance with previous guidelines.

The OECD has criticised other Member States for insufficient or non-existent prosecution of foreign bribery, considering the corruption risks their companies face abroad”

PUBLIC PROCUREMENT

Debarment and Sanctions

Debarment

In line with the EU legislation, there are mandatory debarment/exclusion rules in place in all Member States according to which bidders against whom final court convictions for corruption have been handed down are excluded from the tender. Many national laws contain self-cleaning provisions. In many Member States contracting authorities have cross-access to their internal debarment databases. International debarment lists are, as a rule, not considered as a basis for exclusion in EU Member States.

Sanctions

In most Member States corruption in public procurement is covered by criminal offenses such as bribery and trading in influence. There are Member States where specific corruption related offences affecting the course of public procurement are incriminated distinctively. As a rule, procurement procedures are suspended, interrupted or cancelled when a corrupt behaviour or a conflict of interest is detected. However, the situation is different in the case of concluded contracts in relation to which corrupt behaviour or a conflict of interest is detected or occurs after the award of the contract. In many cases, apart from the sanctioning of corrupt behaviour or conflicts of interest as such, separate civil action for the annulment of the public contract is required. This often entails lengthy procedures and risks producing effects at a too late stage when it is difficult or even impossible to fully recover the losses. In some other Member States, public contracts include an anti-corruption clause that guarantees more effective follow-up in the event of corrupt practices being proven within the lifetime of the contract (e.g. clear-cut procedures for declaring a contract null and void or for applying other contractual penalties).

In some Member States where corruption in public procurement raises particular concerns, the track record of prosecutions and final court decisions is weak, and few cases of public procurement corruption are finalised with dissuasive sanctions. These cases usually take a long time and, frequently, contracts or projects are already executed at the time when corrupt practices are discovered. Cases of corruption in public procurement are often complex and at times they may involve high-ranking officials. Specific technical knowledge is therefore required in order to ensure effective and fair judicial proceedings. In some Member States, shortcomings remain as to the training of prosecutors and/or judges on public procurement matters.

Every company working internationally and doing business which involves interaction with public or governmental officials are really exposed and fully liable in case of corruption whether directly or through intermediaries. The awareness of the potential risks and their mitigation through a robust Compliance Program is a top priority for these companies to protect themselves against the risks of corruption and to avoid criminal investigations.

Prevention is essential and may avoid tough investigations and litigations and will definitively help to minimize the possible sanctions: fines, debarments, reputation consequences. In this respect and to give more emphasis to this key topic, jdl.ethiconsult suggests to call Preventigation this specific prevention.

Companies which will not decide to put in place an appropriate policy to avoid corruption in their transactions, through a visible compliance program, are exposed to strongly destroy their assets and values if they are investigated by tough judicial authorities. Extra territorial provisions by some enforcement authorities enlarge the scope of investigations and increase significantly the risks to be caught in case of corruption.

To put in place a program takes time and needs a strong courage and a full determination. To wait too long before proceeding to a Global Corruption Risk Assessment may put a company in real danger. Nevertheless, a program able to help companies to defend themselves against bribery and corruption bad practices from isolated employees, must be necessarily mature to be taken into consideration by the prosecutors and one can imagine that this maturity cannot not be reached in some days. Adopting the Preventigation as soon as possible may prevent from the bad surprises of painful and costly investigations.

In March 2015, the French Service Central de Prévention de la Corruption (SCPC) has issued the “French Guidelines ” in order to help the companies to prevent corruption in their transactions. This document is a major contribution to the picture and France joins the limited club of countries which have issued guidelines such as the USA and the UK.

The first step could be a Preventigation Check to review all the potential corruption risks within a company.

Impressive literature exists on Ethics & Compliance since the issue of the first FCPA provisions in the USA in the seventies. The bibliography is immense over the world and recommendations have been issued by many international bodies, law firms, audits firms, multilateral development banks, NGO’s, compliance experts etc… Every day a new analysis, brochure or book is published on the ethics and compliance topic. Nobody could say that he is ignorant of the current obligations to comply with both the soft and the hard laws.

Companies have in hands all the supporting documentation to help them building an Ethics and Compliance Program or an Integrity Programme and organize the appropriate communication within the company through an organized and customised training of their employees.

The tone from the top is a pre-requisite and the first step is to tackle the issue appropriately and to make a necessary in-depth review of its compliance risks through a global risk assessment. The starting point is a thorough diagnosis of the risks to which the companies are exposed and for each of these risks to implement an efficient policy and a roadmap.

Literature is huge in Ethics and Compliance but it cannot replace the determination from the top management and from the executives, as well as the courage to change the culture of integrity of the company in implementing a Compliance Program which results from its risk profile.

ICC Ethics and Compliance Handbook

As far as documentation is concerned, on December 9, 2013, the International Chamber of Commerce has issued and Ethics and Compliance Handbook, written by practitioners for practitioners. This handbook details the challenges companies have to face when then build or monitor their compliance program.

The objective of this practical guide is to be a training tool for practitioners. Jean-Daniel LAINE, with the contribution of Tiphaine de Sachy has written the chapter dealing with Risk Assessment.

Never delay the necessary changes in the Culture of Integrity of your company, if this topic has not been tackled properly. Among various misconducts, corruption is really a scourge for companies, not because it is morally unacceptable, but because bribery and corruption destroy the companies value. Companies have the general tendency to wait too long before allocating the adequate resources in ethics and compliance.

When facing troubles, companies are obliged to vigorously react and to put in place the necessary prevention and control instruments. Nevertheless, the best approach is to have a strategic and pro-active attitude and not only a reactive one. The risk to be caught today is huge, in a world of open communication and large flow of information. The reputation of a company can be destroyed immediately and for a very long period if cases of corruption are discovered. Moreover in such circumstances, the credibility of the top management is at stakes.

The culture of integrity of a company must be embedded in its day to day life. But in fact changing the Culture of Integrity needs courage, trust, authority, fairness, determination and strong willingness to reach this objective. An fair and thorough assessment of the risks as well as a clear view of what needs to be done must be undertaken without delay.

Top management, senior executives and all employees must be convinced that the only way to succeed in the long term is to act with integrity and to only rely on the own assets of the company which are generally great: engineering capabilities, R&D, technology, products, human resources, sales forces, localization of the factories. All these assets may be spoiled in a minute by the bad attitudes of some employees who have a short term approach such as cheating, fouling, corrupting etc…

A company which has not yet embraced the Culture of Integrity is fragile as the fight against corruption has been reinforced everywhere. More and more States in the world don’t accept corruption as it undermines the development of the countries and are implementing rigorous laws. Simultaneously, OECD countries and G20 countries have taken additional measures to fight bribery corruption as they lead to significant distortion of competition.

When the Integrity Program based on values is fixed in line with the company business model, the employees must be trained worldwide with the appropriate tools. A combination of ethical culture principle, knowledge of the laws and obligations and teaching by practical examples.

Through jdl.ethiconsult, Jean-Daniel Lainé is at your disposal to help you thinking about the corruption risks in your company when it comes to international contracts or transactions, building a Culture of Integrity or enhancing an Integrity Program.

Business ethics enhance the company value in the long term in converting corruption risks into performance and profit

Willful blindness is not a policy for respectable companies as the costs of non-compliance could be enormous.

Business Ethics is always a challenging issue for international companies as pitfalls of non-Compliance may be encountered everywhere, everyday.

A company’s reputation can be destroyed in a very short term when it comes to the discovery of a corruption act in its transactions. Corruption is everywhere in the world and can be roughly evaluated at more than 1000 billion USD each year.

The basics:

Tone from the top and executive management

An appropriate ethics and compliance team

A global risk assessment from the company risk profile

A Compliance Program or Integrity Program properly built and monitored

An a adequate communication and customized training

A hot line and misconduct reporting mechanism

Through jdl.ethiconsult, Jean-Daniel Lainé can provide assistance and support to international companies in order to avoid the major pitfalls, when the ethics and compliance topic is not dealt with properly, and to guide them to navigate to safe waters, in particular in the anti-corruption prevention field.

Choosing the Preventigation (Prevention to avoid Investigations) is a good way to safely navigate and avoid the dangerous pitfalls of non-compliance.

Even if companies have no intention at all to bribe, their employees are sometimes facing intense solicitations during the course of businesses. To find its way to properly answer solicitations is not easy. Employees who are facing a situation of extortion or solicitation must be in a position to resist. Each time you accept a facilitation payment you are exposed to further and increased solicitations.

It is essential for international companies to have a Compliance Program in order to prevent misconducts, illegal payments and more importantly corruption of civil servants. Further to the introduction of the FCPA in the seventies in the USA, some years later the OECD has issued its convention on bribery and corruption in 1997 and has mobilized many international jurisdictions to persuade them to adapt their laws in order to intensify the fight against corruption. These new laws have led to sanction companies with huge fines and to indict both companies and individuals. In addition: a debarment, the exclusion of markets and sometimes the obligation to have an external monitor.

Even though having a Compliance Program in place is not sufficient, at least it enables the companies to show and to prove that they have taken adequate measures to prevent bribery and corruption. Moreover Compliance Program is key to protect the reputation of a company which is an invaluable asset. There is no “one-size-fits all” program which must be customized depending on the company business model and risk profile. Companies cannot ignore the huge risks associated to corruption issues and must not remain inactive in this domain waiting for the whiplash of judicial authorities enforcement. On the contrary Companies must be pro active in evaluating all the potential risks, in implementing an adequate Compliance Program with a set of efficient procedures to prevent corruption in any corner of the Company.

For information the United States Attorneys Manual (USAM) gives some guidance on this specific topic in the paragraph 9-28.800 such as:

Duties of Federal Prosecutors and Duties of Corporate Leaders

– Compliance programs are established by corporate management to prevent and detect misconduct and to ensure that corporate activities are conducted in accordance with applicable criminal and civil laws, regulations, and rules. The Department encourages such corporate self-policing, including voluntary disclosures to the government of any problems that a corporation discovers on its own. However, the existence of a compliance program is not sufficient, in and of itself, to justify not charging a corporation for criminal misconduct undertaken by its officers, directors, employees, or agents. In addition, the nature of some crimes, e.g., antitrust violations, may be such that national law enforcement policies mandate prosecutions of corporations notwithstanding the existence of a compliance program……

–While the Department recognizes that no compliance program can ever prevent all criminal activity by a corporation’s employees, the critical factors in evaluating any program are whether the program is adequately designed for maximum effectiveness in preventing and detecting wrongdoing by employees and whether corporate management is enforcing the program or is tacitly encouraging or pressuring employees to engage in misconduct to achieve business objectives. The Department has no formulaic requirements regarding corporate compliance programs. The fundamental questions any prosecutor should ask are: Is the corporation’s compliance program well designed? Is the program being applied earnestly and in good faith? Does the corporation’s compliance program work? In answering these questions, the prosecutor should consider the comprehensiveness of the compliance program; the extent and pervasiveness of the criminal misconduct; the number and level of the corporate employees involved; the seriousness, duration, and frequency of the misconduct; and any remedial actions taken by the corporation, including, for example, disciplinary action against past violators uncovered by the prior compliance program, and revisions to corporate compliance programs in light of lessons learned……

-Prosecutors should therefore attempt to determine whether a corporation’s compliance program is merely a “paper program” or whether it was designed, implemented, reviewed, and revised, as appropriate, in an effective manner. In addition, prosecutors should determine whether the corporation has provided for a staff sufficient to audit, document, analyze, and utilize the results of the corporation’s compliance efforts. Prosecutors also should determine whether the corporation’s employees are adequately informed about the compliance program and are convinced of the corporation’s commitment to it. This will enable the prosecutor to make an informed decision as to whether the corporation has adopted and implemented a truly effective compliance program that, when consistent with other federal law enforcement policies, may result in a decision to charge only the corporation’s employees and agents or to mitigate charges or sanctions against the corporation. Compliance programs should be designed to detect the particular types of misconduct most likely to occur in a particular corporation’s line of business…..

A Compliance Program is an absolute necessity to be in a position to control and prevent misconducts through adequate procedures but more importantly it is also both an opportunity and a path to radically change the company culture and to create a true ethical climate based on Trust and Integrity. An ethical climate fully disseminated within a company will enable the employees to fully concentrate themselves on the real assets and resources of the company.

ALSTOM Ethics & Compliance Overview

June 2013

Alstom‘s culture and reputation for integrity is a key objective for the Group and this can only be built through a permanent strengthening of its ethical rules and procedures as well as the adhesion of all its employees who must know and rigorously apply the principles of our Code of Ethics and the Alstom Integrity Programme.

Alstom complies with laws, regulations, and international standards that apply to the conduct of business in all countries in which it is present and does business. In particular, Alstom complies with the OECD Anti-Bribery Convention, with French criminal law, with US legislation notably the Foreign Corrupt Practices Act (FCPA), the UK Bribery Act 2010, and follows the voluntary standards of the International Chamber of Commerce (ICC) and the guidance of the “Resource Guide to the US Foreign Corrupt Practices Act”.

Tone at and from the Top

Ethics & Compliance is a top priority for Alstom and the Chairman and CEO regularly confirm this statement with the full support of the Board of Directors.

In September 2010, the Board of Directors created the Ethics, Compliance and Sustainability Committee, composed of three independent Directors. The EC&S Committee regularly reviews and monitors Alstom’s policies on ethics and compliance matters; and it provides the Board of Directors with its views. The Alstom SVP Ethics & Compliance is secretary for the Ethics and Compliance element of the Committee.

The mission of the Ethics & Compliance Department is to prepare the content of the Alstom Integrity Programme and to foster its implementation throughout the Group worldwide. The Group culture embraces all the ethical best standards based on the Alstom values: Trust, Team and Action. This culture must permeate the whole organisation. The tone from the top comes not only from the Board of Directors, but also from the company’s management and is trickled down to all employees.

Alstom supports the “And”

Performance And Integrity

Efficiency And Ethical behaviour

Profitability And Trust from stakeholders

Growth And Good Governance

The philosophy is that no performance objectives should be imposed or accepted by any employee of the company if it can only be achieved by compromising our ethical standards.

Organisation

The Ethics & Compliance organisation comprises approximately 30 people. Ethics & Compliance has full authority and independence through a direct reporting link to the Group General Counsel. Moreover, the SVP Ethics & Compliance has a direct access to the Alstom Chairman and CEO and to the Chairman of the EC&S Committee of the Board. The SVP Ethics & Compliance is therefore fully independent and has an unfiltered access to the governing authorities of Alstom.

The Ethics & Compliance Department comprises, in particular, Compliance Officers respectively in charge of the Alstom Integrity Programme Development, of the Due Diligence, of Checking & Control, Sector Compliance Officers responsible for the application of the Ethics & Compliance policy in their Sectors reporting directly to the SVP Ethics & Compliance and finally Country Compliance Officers directly reporting to the SVP Ethics & Compliance are in place in countries or regions where Alstom has significant operations.

A specific relationship exists between the Ethics & Compliance, Legal and Internal Audit departments who meet regularly, especially before and after audit missions.

The Group Ethics & Compliance Council gathers the Group General Counsel, the CFO, the SVP HR and the SVP E&C and meets twice a year.

To ensure good coordination with the Sectors, the SVP E&C regularly meets the Sector Presidents together with the relevant Sector Compliance Officer. At Sector or Country levels, the Compliance Officers organise regular meetings with the top management to ensure the deployment of the Alstom Integrity Programme.

Finally, to promote the Alstom Integrity Programme throughout the Group and to continuously develop its ethical culture, approximately 300 Ethics & Compliance Ambassadors have been appointed.

Sales business partners

Suppliers and contractors

Joint Ventures and Consortia

Engineering and Project Management

Conflicts of interest

Charitable and Political contributions

Gifts and Hospitality

Sponsorship

The foundations of the Alstom Integrity Programme

The Alstom Integrity Programme aims to promote a culture of integrity, at preventing and detecting misconducts, infringement of laws, illegal payments and to protect the company and its employees.

The Alstom Integrity Programme is based on a risk assessment. It is continuously enhanced through meetings with peers, anti-corruption experts, and specialised law firms to exchange views, good practices and benchmarking and legal opinions. Finally, to ensure it is best in class a regular certification process has started in 2008.

The E&C Risk assessment is part of the Group risk management policy and is a section of the Group yearly Risk Assessment review and of the Risk Mapping. The E&C Risk assessment is a tool designed to identify and set the key priorities, to create the best ethics and compliance programme fit for the Group and develop new actions to mitigate risks.

The E&C Risk assessment is based on an analysis and a ranking of the potential risks linked to the Group activities and it identifies the mitigation factors currently in place and those to be implemented. To have the best analysis, the E&C Risk assessment is complemented by external sources of information such as the US Federal Sentencing Guidelines, the UK Bribery Act 2010 Guidance, the OECD Guidelines for Multinational Enterprises, the ICC Guidelines, the Transparency International Business Principles for Countering Bribery and the Transparency International corruption perception index.

Code of Ethics

The Code of Ethics applies to every employee within the Group. Published in 2001, it was reviewed, updated and issued in March 2010. It has been translated in 22 languages, English, French, Arabic, Chinese, Croatian, Czech, Dutch, Finnish, German, Greek, Hindi, Hungarian, Indonesian, Italian, Japanese, Polish, Portuguese (Portugal and Brazil), Romanian, Russian, Spanish, Turkish. Additional languages can be added upon request.

The Code of Ethics provides official and mandatory guidelines on key principles and commitments that must be met by managers, by employees and by the Group as a whole every day. Every employee within the Group must respect the principles and rules of the Code of Ethics, and as such is accountable for his or her actions.

The Code of Ethics prescribes fundamental rules of conduct, relating in particular to:

Full compliance with laws, regulations and requirements in all countries where the Group operates;

Prevention of corruption and prohibition of all unlawful payments and practices;

Fair and open competition and prohibition of agreements with competitors;

Internal control and disclosure of information, to ensure the quality and reliability of financial information.

The Code of Ethics prescribes essential rules of conduct with regard to the Group’s relationships with business partners; its commitments as a socially responsible company; human resources policies and commitment in protecting the Group’s assets.

Topics addressed include the way Alstom deals with customers, suppliers, sales business partners, governments, export and trade controls, money laundering, conflicts of interest, gifts and hospitality, political contributions, charitable contributions, sponsorship, protection of the environment, health and safety, security of employees, social relations, equal opportunity and diversity, career management of employees, data privacy, confidential information, intellectual property, use of communication resources, insider dealing and communication with the media and investors.

In addition, the Code of Ethics details the Alert Procedure which allows any employee to report violations of prevention of corruption, competition and securities and accounting laws and regulations.

With regard to sourcing, procurement and supply chain, all Alstom suppliers and contractors are requested to sign the Alstom Charter for Sustainable Development, which includes a reference to the Code of Ethics and a section on Ethics and the prevention of corruption. This Charter, which may be considered as a Code of Ethics for Suppliers, exists in 12 languages, English, French, Chinese, German, Indonesian, Italian, Polish, Portuguese (Brazil), Russian, Spanish, Swedish, Turkish. As of March 2013, more than 10,000 suppliers and-contractors have already expressed their commitment by signing this Charter. Compliance with the Charter is also integrated in Alstom’s general purchasing conditions.

Strengthening of the compliance processes

Over the last decade Alstom has permanently strengthened its internal rules and procedures to ensure that our commercial Business Advisors comply with their obligations and do not engage in illegal practices or make unlawful payments.

January 2001

A General Instruction “Re-enforcement of the existing Alstom rules for Selection, Use of and Payments to Agents for Business Transactions” is issued by the Chairman and CEO Pierre Bilger, followed the same month by an instruction « Rules and Procedures for the Selection, Use of and Payments to Agents » issued by International Network.

February 2001

Creation of the 1st version of the Alstom Code of Ethics.

September 2004

A message by the Chairman and CEO Patrick Kron confirms the importance of the Alstom Code of Ethics with the application of the zero tolerance policy designed to avoid unlawful payment and practices.

January 2006

The Representation & Compliance Department is renamed Ethics & Compliance with an enlarged scope in line with Alstom’s will to strengthen its policy in terms of integrity beyond its obligations to comply with national and international laws.

March 2006

The e-learning module on Competition Law is launched.

January 2007

The Ethics & Compliance department issues detailed “Rules, Procedures and Guidelines for the Selection, Use and Payment of Agents” applicable to the all-operational Sectors.

April 2007

Distribution to all employees of 80,000 copies of an updated version of the Code of Ethics entitled “Our identity, our values, our code of ethics” printed in 17 languages.

Implementation of an Alert Procedure available to any employee who may have reasons to believe that corruption, competition, securities of accounting laws or rules are not being respected.

June 2007

The Ethics & Compliance department appoints an external company to carry out external report on consultants and representatives to further strengthen its Due Diligence process.

January 2008

The “Pre-Appraisal” process is launched. The process requires a meeting with Ethics & Compliance and the representative of the sector concerned to discuss the necessity to appoint a consultant, the justification and a review of the situation, before any commitment is made. Another initiative is also launched with the “Application Form” which must be systematically completed by the sectors.

March 2008

As part of a continuing process of self-assessment, an outside lawyer with extensive practical compliance experience is appointed to review the Ethics & Compliance organisation,

A certification process of our Rules and Procedures, by a company working with an international group of experts, is initiated.

May 2008

Decision to review the Ethics & Compliance organisation in order to avoid any possible internal conflict of interests (the Sector Compliance Officers report to the SVP Ethics & Compliance with a functional reporting to the sector General Counsel) and to reinforce the team by the recruitment of new Compliance Officers.

June 2008

Launch of an e-learning module on Prevention of Corruption.

February 2009

Appointment of the Power Compliance Officer.

March 2009

The certification by ETHIC Intelligence of the rules and procedures for dealing with sales consultants is obtained after an audit by SGS conducted between September 2008 and March 2009.

Overall both the quality of our compliance policy and the quality of its implementation have been rated as “exemplary” and corresponding to international best practices. As a consequence of this positive review, Alstom was awarded a specific certificate on 12 March 2009, granted for two years.

April 2009

Appointment of the Transport Compliance Officer.

Launching of a Due Diligence Review Committee to enable the Ethics & Compliance department to take a position on the Due Diligence of a business advisor through an objection or non-objection process. Unanimity among the participants is requested to take a position.

June 2009

The Rules and Procedures for Dealing with Sales Consultants is fully updated.

A dedicated Ethics & Compliance section is made available on the Alstom Intranet, Altair

October 2009

The Letter of Mission of the SVP Ethics & Compliance is issued.

December 2009

Decision of the Executive Committee to manage the “payment and control” companies to be created in France from the Corporate Headquarters.

February 2010

Launch of the appointment of Ethics & Compliance Ambassadors,

Issue of four new Ethics & Compliance Group Instructions relating to Gifts & Hospitality, Political Contributions, Charitable Contributions and Sponsorship.

March 2010

Release of the updated version of the Code of Ethics: distribution of the booklet availablein 21 languages to all employees with a print run of more than 130,000 copies,

Deployment of the e-Ethics module: mandatory for all 35,000 Managers and Professionals of the Group.

Appointment of the Alstom Integrity Programme Development Compliance Officer.

May 2010

Decision to renew the ETHIC Intelligence certification in March 2011,

Kick-Off of the Ethics & Compliance Ambassadors community.

June 2010

20,000 new employees join from Grid and receive the Code of Ethics,

The SVP Ethics & Compliance adheres to the IBE (Institute of Business Ethics – UK).

September 2010

The Board of Directors decides the creation of a new committee, the Ethics, Compliance and Sustainability (EC&S) Committee consisting of 3 independent directors of the Board. The SVP Ethics & Compliance is the secretary of the EC&S Committee for the E&C element.

Approximately 90% of the Managers &Professionals have completed the e-Ethics module

November 2010

Launch of the Ethics communication campaign. A poster translated into 10 languages is displayed on all sites

A section dedicated to Ethics is available on Alstom’s internet website

December 2010

Launch of the new Group Instruction for dealing with consulting companies

Alstom partners with the Ethos Institute in Brazil, and sponsors of its “Pact for Integrity and against corruption”

January 2011

Launch of the ETHIC Intelligence certification process for renewing the certification of the procedure for dealing with sales and marketing consultants in Power and Transport and obtaining the certification of the procedure for dealing with sales intermediaries in Grid.

February 2011

Appointment of the Grid Compliance Officer

March 2011

Launch of the Group Instruction for managing conflicts of interest

April 2011

Award of the ETHIC Intelligence renewed certificate for the procedure for dealing with Business Advisors in Power and Transport.

Alstom joins The Centre for Business Ethics and Corporate Governance in Russia.

May 2011

Award of the ETHIC Intelligence certificate for the procedure for dealing with sales intermediaries in Grid.

Launching of the process for obtaining the certification of the Alstom Integrity Programme as a whole.

June 2011

Centralisation payments to Business Advisors are no longer undertaken in the UK and in Switzerland but through Companies registered in France where Alstom has its headquarters.

September 2011

The positioning of Ethics & Compliance function is reviewed in the framework of the new organisation of the Group. The SVP E&C directly reports to the Group General Counsel, with a direct access to the Chairman and CEO and to the Ethics, Compliance and Sustainability Committee of the Board.

Award of the ETHIC Intelligence Certificate for the Alstom Integrity Programme.

50 new E&C Ambassadors are appointed.

November 2011

A new e-learning programme called Sourcing and Procurement Compliance is launched. It is made of 2 modules focusing on the prevention of corruption, of breaches of competition law and of conflicts of interest in sourcing, procurement and supply chain employees.

December 2011

The Group Instruction for Dealing with Business Advisors is fully updated.

January 2012

Launch of the Group Instruction for Dealing with Resellers.

Complete update of the E&C Section on Altair to provide more information to employees.

February 2012

Launch of the Yearly Integrity Review.

March 2012

Launch of e-Ethics in Grid introduced by a message from Grid President.

April 2012

Update of the Ethics Section on Alstom’s internet websitealstom.com to provide external stakeholders with more information and give them access to E&C policies.

May 2012

Appointment of a Competition Law Director at Group level reporting to the Group General Counsel.

July 2012

August 2012

e-Ethics e-learning module is available in Arabic.

The Group Instruction 6.7 on Competition law and appendices are fully updated.

September 2012

Launch of the Business Advisor Integrity Kit to ensure Business Advisors are properly trained on prevention of corruption and on our process.

October 2012

Appointment of a full-time Compliance Officer in the USA.

Appointment of a trainee to support the project “Alstom Integrity Training Programme”, which aims at creating new face-to-face training modules for exposed employees and the update of the e-learning module on Prevention of Corruption.

February 2013

Appointment of a Compliance Officer in Germany. In addition, it was decided to give a role of part-time Country Compliance Officer to two Legal Counsels in the UK and Mexico.

April 2013

Appointment of a Compliance Officer in South Africa, senior Legal Counsel in addition to his Legal role.

Update of the Group Instruction for Acquisitions & Disposals e-Book 5.26

May 2013

Launching of Group Instruction for Preventing Corruption in Joint Venture and Consortium e-Book 2.9

June 2013

Update of Group Instruction for Dealing with Business Advisors e-Book 2.4

Appointment of a Compliance Officer in Russia and a Compliance Officer for Training and Coordination

Instruction for Sales Business Partners

Such a large and diversified company like Alstom, serving complex worldwide markets, cannot only rely on its own sales resources. Depending on the circumstances, the operational Sectors may need to complement their knowledge, their expertise and/or their sales resources by hiring reputed sales business partners who are committed to act with integrity and to comply with Alstom rules as well as the international and local laws. These requirements are essential as risks exist for the Group, should Sales business partners behave unethically and engage in illegal practices.

To be in a position to control the relationship between a Sales business partner and a Sector, Group Instructions have been established and are controlled at key milestones by Ethics and Compliance. Alstom has deployed all its efforts to strengthen its internal procedures, by increasing centralisation of controls pertaining to these agreements. In this respect the Ethics & Compliance Department introduced and implemented clear and transparent procedures, to make sure they are strictly applied by the operational Sectors and businesses and to make use of external investigation tools and means to check the integrity and competence of those Sales business partners. The procedures are regularly strengthened to take into account past experience or proactive initiatives to eliminate possible risks.

In practice, if a business Sector wishes to rely on services provided by a Sales business partner, it has to generate a formal application, stipulating the reasons for such a need, the required services and the proposed corresponding remuneration. The application document produced by the Sales department of the Sector is discussed during a Pre-Appraisal meeting organized by the Sector Compliance Officer. Sector approval must be signed at the highest level in the business organisation. In parallel Due Diligence is undertaken by Ethics & Compliance. A meeting of the Due Diligence Review Committee makes the decision on a unanimity basis to authorize or not such cooperation with a Sales business partner. Ethics & Compliance acts as a quality control department and at key milestones gives either a no objection or an objection to enter into an agreement between the Sales business partner and a Sector legal entity. Sectors give a mandate to pay another group company they do not control directly. The introduction of ad-hoc “control and payment” entities allows for closer control by the effective centralisation of payments as Sales business partner are paid by the “control and payment” companies based in France, where the Group has its headquarters, on behalf of the Sectors after a careful check of the relevant proofs of service by the Sector representatives and of the legitimacy of the payment. Provided specific criteria are met, some payments can be made locally.

In addition, the Sales business partner Integrity Kit aims at ensuring that Sales business partner are properly trained on prevention of corruption and on our process. Compliance Officers visit business advisors and provide them with a comprehensive face-to-face training session. The Sales business partner is given a booklet containing the Code of Ethics in the country language (when available), the training presentation, the Alstom Principles for Dealing with Sales business partner (as published on the Alstom internet website), the E&C Guidelines for Dealing with Sales business partner. At the end of the meeting the Sales business partner signs the Sales business partner Integrity Kit Acknowledgment. This document is kept in our files. In addition, for internal use, Compliance Officers fill in a Feedback form to document how the training underwent.

The Group Instruction is applicable worldwide in all sectors and all countries and is regularly controlled by Internal Audit. The rules and procedure to manage the relationship with business advisors have been granted a certification for 2 years by the company ETHIC Intelligence International after an audit conducted by the Swiss company SGS in March 2009. The Certification was successfully renewed in April 2011.

Other E&C Instructions

All Alstom employees must apply E&C Group Instructions relating to:

Gifts & Hospitality

Political Contributions

Charitable Contributions

Sponsorship

In addition to those 4 Group Instructions, the related Delegation of Authority rules have been harmonised and deployed throughout the Group.

Consulting companies

Management of Conflict of Interest

Joint Ventures and Consortiums

Suppliers and Contractors

Training and e-learning

The e-Ethics module developed with Alstom University focuses on the Code of Ethics. Launched in March 2010, it is available in 9 languages. The module, which is based on practical business scenarios, is completed after the final quiz is correctly answered. The trainee is then awarded a Certificate of Completion. Managers & Professionals are required to complete it within 3 months after they join the Group. Since its deployment, more than 50,000 employees have completed it.

Two e-learning modules dedicated to the Prevention of Corruption and Competition Law are available and employees who are exposed to these risks are formally requested to participate to the e-learning exercises.

For employees working with suppliers and sub-contractors, 2 e-learning modules focusing on the prevention of corruption, of breaches of competition law and of conflicts of interest in sourcing, procurement and supply chain employees were launched in November 2011. The 1st module focuses on knowledge and awareness and provides background on the risks of non-compliance. The 2nd module trains through real life cases based on true Alstom examples. The module is available in 6 languages. Since its deployment, more than 2,500 Sourcing and Procurement employees completed the modules.

Face to face training sessions and e-learning programmes are essential to explain our policy in terms of Ethics & Compliance. Since January 2006, more than 10,000 persons have participated in a compliance session.

In addition, Integrity Culture Cafezinhos have been introduced to favour a bottom-up approach. The Integrity Culture Cafezinhos hosted by the SVP E&C and the Compliance Officers are small groups of people invited to discuss the ethical challenges they face, share ideas to solve dilemmas and propose initiatives to improve the integrity culture of Alstom.

Ethics & Compliance Ambassadors

To reinforce the resources of Ethics & Compliance, approximately 300 Ethics & Compliance Ambassadors, all volunteers willing to promote the integrity culture of the Group, have been appointed in the Group.

The Ethics & Compliance Ambassadors are:

if they agree, the Country Presidents in charge of the governance in their country,

volunteers coming exclusively from the Legal, Finance and Human Resources functions at all levels of the organisation.

The mission of the Ethics & Compliance Ambassadors consists of:

being a key contact on all the Ethics & Compliance topics in their organisation,

being able to direct persons towards the appropriate experts,

supporting people to behave ethically and in taking ethical decisions,

participating in the risk assessment in terms of Ethics & Compliance,

promoting Ethics & Compliance e-learning modules,

organising information-awareness sessions,

providing feedback to the Ethics & Compliance team on issues and concerns.

The Ethics & Compliance Ambassadors have direct contact to Ethics & Compliance through the Compliance Officer for the Alstom Integrity Programme Development, who provides them with support for their mission. At country level, co-ordination by the Country President is necessary to properly manage this initiative.

Communication

To ensure that all our stakeholders are well informed about the Alstom Integrity Programme, the E&C Department works in close relationship with the Communications Department and a variety of communication methods are employed.

For employees:

a dedicated , visible and regularly updated section on Altair, Alstom’s intranet, called ‘Ethics’, containing not only the E&C Instructions but also information on Prevention of Corruption and a monthly Newsletter.

regular news in Alstom’s weekly newspaper, Newsflash and articles in local internal newspaper, whether at country or site levels,

posters displayed on sites.

For external stakeholders:

a dedicated section, entitled ‘Ethics’ on Alstom’s internet web site, alstom.com. In this section, all the versions of the Code of Ethics and E&C policies are available and can be downloaded.

Monitoring

To monitor the performance of the Alstom Integrity Programme, the E&C Department works closely with the Group Internal Control Department to design the appropriate controls and with Internal Audit to include Ethics in audit processes.

In 2012 and in 2013, the first Test exercises of the Yearly Integrity Review was launched in order to gather feedback on the performance of the Alstom Integrity Programme and on the ethical incidents which may have occurred during the year.

The 600 Top Managers in the Sectors complete a questionnaire and send it back to their respective Sector President together with a signed cover letter.

The E&C Department then consolidates the Sector reports, provides the Chairman & CEO and the EC&S Committee members with a summary and prepares and follows up on agreed action plans.

To get the external feedback on the Alstom Anti-corruption policy, a certification process was launched in November 2008 with the company ETHIC Intelligence. The audit methodology is designed by ETHIC Intelligence and was validated by the Basel Institute on Governance. The audit is carried out by SGS, Swiss company. The audit report is evaluated by the ETHIC Intelligence Certification Committee comprising internationally-recognised experts.

The 1st certificate was awarded on March 12th, 2009 for a period of 2 years.

In 2011, 3 certifications have been undertaken in 2011 by ETHIC Intelligence:

the renewal of the certification of the procedure for business advisors for Thermal Power, Renewable Power and Transport. The certificate was awarded on April, 8th 2011;

the certification of the “sales intermediaries” policy for Grid; The certificate was awarded on May,17th, 2011 ;

the certification of the Alstom Integrity Programme as a whole, started in June 2011; The certificate was awarded on September,12th 2011.

This certification process provides strong benefits for Alstom.

It is a clear message to all employees that Alstom is fully committed to strict application of the certified procedures corresponding to the highest international standards in terms of anti-corruption laws and regulations.

It gives the assurance that Alstom has implemented the appropriate rules to prevent corruption in its relationships with business advisors.

It enables continuous improvement and strengthening of the culture of integrity, among other things thanks to the recommendations of the Certification Committee.

Partnerships

In order to continuously enhance the Alstom Integrity Programme and learn from ethics and compliance professionals, the SVP Ethics & Compliance actively participate in the:

Global Compact – Working Group on the 10th Principle (Fight against corruption).

Signature of the Alstom of the Malaysian Anti-Corruption Commission (MACC) Corporate Integrity Pledge.

More than ever, Business Ethics is a priority for international companies which can be severely damaged if they don’t take care of this important topic. Corruption of a public servant is a crime and penalized as such. In this respect, the corruption risk exists for companies as soon as they use the services of Third Party Partners to act on their behalf. It is very difficult to be fully sure that the money or a part of it, paid by the companies to these Third Party Partners is not badly utilized for corruption purposes. In any case and even if the company is not aware of the destination of the funds, its liability is engaged in case of a corruption act by the third parties involved. To put the head in the sand is then a quite dangerous option.

Third Party Partners to avoid corruption risks: monitoring of a thorough Due Diligence, visit of the third parties in their own offices, right of audit and clawback clauses included in the contrat etc….

Generally speaking, international companies cannot avoid to use Third Party Partners as they cannot only rely on themselves in each business context.

Third Party Partners are then quite common : sales agents, consultants, joint venture and consortium partners, suppliers…. Sales agents are probably the most risky partners : an additional reason to be more vigilant.

Through jdl.ethiconsult, Jean-Daniel Lainé can provide international companies with adequate and customised support to help them navigate in safer conditions. Adopting appropriate integrity and compliance measures can significantly limits the risks and the company’s exposure. Preventigation (prevention to avoid investigation) is a way to be safe in the long term.

The level of cooperation between the enforcement authorities in France (Financial Public Prosecutor’s Office), USA (Department Of Justice), UK (Serious Fraud Office) and everywhere in the world obliges the companies to adopt a global approach in terms of Anti-corruption, Compliance with Competition Law and more generally Business Ethics.

Dealing with Third Parties represents a major risk for companies with global operation worldwide. Companies relying on Third Parties may be fully liable for the misconduct or improper payments made by such Third Parties.

Minimizing the Third Party Risks

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